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Monday, 1 December 2014

Building bridges

This article was published in The Malta Independent on Sunday - 30th November 2014

There are many bridges that we need to build but a good number of them are not the concrete and steel type. We need bridges to a consensual approach for national problems which stretch beyond a single legislature and a bridge to more maturity in the way of doing politics.

But first let us get out of the way the most talked-about concrete and steel bridge. Following the publication of studies made by Chinese consultants showing concepts of the most technically feasible bridge connection which avoids fixed support on Comino, as well as financial estimates thereof, there was general consensus that this solution was both environmentally offensive and economically unfeasible.

One must not prejudge the feasibility of similar studies yet to be concluded on a sub-sea tunnel connection, which would certainly be less visually offensive but would, I very much suspect, be equally economically unfeasible. At this stage I would re-state what I wrote in this column on 11 August 2013:

"Even if such a connection were to be financially and economically feasible, I doubt whether it would address the basic problem that is making Gozo's economy unsustainable. Would young people who cannot find work in Gozo continue to live there because they can commute more quickly and easily with a fixed connection than with the ferry service? I doubt that very much, and the lure of relocating closer to where they work will remain - with a bridge as much as without it.

"And if Gozo becomes as accessible as Mellieħa, causing occasional visitors to lose the experience of the ferry crossing, would Gozo retain its attraction for day visitors and home tourism?

"Gozo needs a bridge but not one made of concrete and steel. It needs an economy that can sustain a much bigger population so that increased job opportunities in Gozo would make relocating to Malta a real option not an economic necessity. With a population density slightly more than one-third that of Malta, there is ample scope for a 50 per cent increase in the Gozo population from 31,000 to, say, 47,000 and still have a population density half that of Malta. With sensible planning, Gozo can absorb this population increase and retain the greenery and scenery nature endowed it with.

"Any investment in unthinkable millions to build a fixed link will egoistically benefit the current Gozo commuters but will prejudice the attractions of Gozo itself as much as it will belittle opportunities for those who aspire to see Gozo reaching economic sustainability by building on its attractions and uniqueness rather than becoming just another place in the Maltese Islands."

Gozo has just had its most successful tourist season ever. The Gozo Channel Company is reportedly operating back in the black. Strong data services connection is attracting to Gozo IT and back-office services that do not require physical transport services, and an interesting medical-tourism project with strong international investment is reportedly in the making. An environmentally friendly green urban air strip seems possible with very moderate investment and this would link Gozo directly with tourist sources from nearby regions, most especially Sicily and southern Italy.

These are the things that Gozo needs to give the real choice that Gozitans deserve - namely to find job opportunities in Gozo rather than be forced to commute or relocate to Malta. For those who need to commute regularly, the feasibility of a fast morning and evening ferry service directly to Valletta must continue to be explored.

Bridges to political maturity are, however, more urgent and important. Political pressure for a Minister to resign before a panel of three retired senior judges conclude their investigations into whether or not the Minister concerned participated in an attempted cover-up of the shooting by the Minister's driver seems to suffer from the same syndrome that has landed the driver in trouble, ie shoot first and analyse later.

Persisting with the argument that Malta's economy could be on the path to demanding an economic bailout is irresponsible, even if it were true - which it is obviously not. An economy growing above three per cent in real terms, with a falling fiscal deficit, reduced unemployment and a stable balance of payments position cannot by any stretch of the imagination be a candidate for a bailout.

The only criterion where we fall way out of Maastricht rules is the debt level to GDP which is still at around 70 per cent of GDP. However, on this issue we are in good company with other countries considered strong, like Germany, and it is an issue the economic relevance of which is increasingly being doubted in economic circles. What is relevant in the current environment of exceptionally low interest rates is more the ratio of debt servicing to GDP rates than debt to GDP, meaning that at low interest rates, economies can successfully maintain a higher level of debt, especially if this goes to finance productive infrastructure.

Political maturity is required to reach consensus on other serious issues, especially those with long-term consequences spanning several legislatures. Is our health services model sustainable for the long term as an ever-increasingly aging population continues to make an exponential increase in demand for health services? Can the model of political parties running their own commercial activities co-exist with legislation to control the financing of political parties? Is our fiscal model for attracting international business sustainable, considering EU Commission initiatives to control tax competition using state aid rules? How can we attract real honest talent to politics if we maintain the current parliamentary and ministerial pay structures?

These are issues that can only be resolved if both sides of the political fence, beyond their daily spats to grab the headlines, produce a line-up of mature people who can discuss issues with a long-term perspective, bearing in mind that resolution of these issues will not only work for the party in government but also for the party in opposition who, by the time such issues take effect, could have well benefited from the democratic rotation of executive power.

In this context it is appropriate to finish with homage to the late Lino Spiteri who passed away two weeks ago. Lino was a model of political maturity. His loyalty to Labour was unquestionable but his mind was his own. The memory of Lino Spiteri should spur serious politicians on both sides of the political divide to pursue politics in his style and to put the nation's long-term interests before the immediate gains or losses of their popularity.